FAME 3 Scheme To Offer Incentives On Hybrid Cars: Report

FAME 3, the third phase of the electric vehicle incentive scheme is set to launch soon with an allocation of around Rs 10,000 crores. According to an ET report, FAME 3 will focus primarily on promoting electric two-wheelers, three-wheelers and government buses. The inclusion of electric cars, especially for fleet operators like taxi services, is still under consideration.

ALSO READ: Volkswagen To Develop Affordable Electric Vehicles To Compete With Chinese Rivals: Report

This new phase will resemble the previous FAME 2 scheme, which ended in March 2024. FAME 2 had provided a 15 per cent subsidy on the purchase price of electric scooters in India. To bridge the gap after FAME 2, the Electric Mobility Promotion Scheme (EMPS) was introduced temporarily. With a budget of Rs 500 crores, EMPS supports the sales of electric two-wheelers and three-wheelers until July. It offers incentives up to Rs 10,000 per electric two-wheeler and up to Rs 50,000 per electric three-wheeler, with a Rs 5000 per kWh subsidy.

However, FAME 3 is likely to exclude subsidies for electric cars, even for commercial fleets. There is ongoing debate about whether electric cars need any subsidy. The current proposal suggests incentives for electric cars priced below Rs 15 lakhs, similar to FAME 2. Hybrid cars might also receive support if passenger cars are included, with the same price limit.

New guidelines will be introduced in FAME 3, requiring companies to seek re-certification to avail of benefits. EMPS aims to support the sales of 3,72,215 electric vehicles, including 3,33,387 electric two-wheelers and 38,828 three-wheelers, by providing incentives to vehicles equipped with advanced batteries.

ALSO READ: Porsche 911 GTS Hybrid Unveiled Globally, Gets Improved Performance, Aerodynamics; Details

FAME was initially launched to boost local manufacturing and sales of electric vehicles and provides demand incentives to customers. Under FAME 3, all companies must obtain new certification to qualify for incentives. Unlike FAME 2, which spanned five years, FAME 3 will be valid for two years. A key objective of FAME 3 is to increase the number of subsidised electric buses for State Transport Undertakings. Under FAME 2, the government supported the purchase of 7,000 electric buses, a figure expected to rise with FAME 3.